Title 18, Title 18 — Corporations

Articles of organization. FORMATION OF LIMITED COOPERATIVE ASSOCIATION; ARTICLES OF ORGANIZATION. (a) To form a limited cooperative association, an organizer of the association must deliver articles of organization to the Secretary of State for filing. The articles must state: (1…

ORGANIZATION OF LIMITED COOPERATIVE ASSOCIATION. (a) After a limited cooperative association is formed: (1) If initial directors are named in the articles of organization, the initial directors shall hold an organizational meeting to adopt initial bylaws and carry on any other bu…

BYLAWS. (a) Bylaws must be in a record and, if not stated in the articles of organization, must include: (1) A statement of the capital structure of the limited cooperative association, including: (A) the classes or other types of members’ interests and relative rights, preferenc…

AUTHORITY TO AMEND ORGANIC RULES. (a) A limited cooperative association may amend its organic rules under this article for any lawful purpose. In addition, the initial board of directors may amend the bylaws of an association under Section 32 of this act. (b) Unless the organic r…

NOTICE AND ACTION ON AMENDMENT OF ORGANIC RULES. (a) Except as provided in subsection (a) of Section 33 of this act and subsection (f) of Section 37 of this act, the organic rules of a limited cooperative association may be amended only at a members meeting. An amendment may be p…

METHOD OF VOTING ON AMENDMENT OF ORGANIC RULES. (a) A substantive change to a proposed amendment of the organic rules may not be made at the members meeting at which a vote on the amendment occurs. (b) A nonsubstantive change to a proposed amendment of the organic rules may be ma…

VOTING BY DISTRICT, CLASS, OR VOTING GROUP. (a) This section applies if the organic rules provide for voting by district or class, or if there is one or more identifiable voting groups that a proposed amendment to the organic rules would affect differently from other members with…

APPROVAL OF AMENDMENT. (a) Subject to Section 36 of this act and subsections (c) and (d) of this section, an amendment to the articles of organization must be approved by: (1) At least two-thirds (2/3) of the voting power of members present at a members meeting called under Secti…

RESTATED ARTICLES OF ORGANIZATION. A limited cooperative association, by the affirmative vote of a majority of the board of directors taken at a meeting for which the purpose is stated in the notice of the meeting, may adopt restated articles of organization that contain the orig…

Filing. AMENDMENT OR RESTATEMENT OF ARTICLES OF ORGANIZATION; FILING. (a) To amend its articles of organization, a limited cooperative association must deliver to the Secretary of State for filing an amendment of the articles, or restated articles of organization or articles of c…

MEMBERS. To begin business, a limited cooperative association must have at least two patron members unless the sole member is a cooperative. Added by Laws 2009, c. 68, § 40, eff. Jan. 1, 2010.

BECOMING A MEMBER. A person becomes a member: (1) As provided in the organic rules; (2) As the result of a merger or conversion under Article 16 of the Uniform Limited Cooperative Association Act of 2009; or (3) With the consent of all the members. Added by Laws 2009, c. 68, § 41…

NO POWER AS MEMBER TO BIND ASSOCIATION. A member, solely by reason of being a member, may not act for or bind the limited cooperative association. Added by Laws 2009, c. 68, § 42, eff. Jan. 1, 2010.

NO LIABILITY AS MEMBER FOR ASSOCIATION’S OBLIGATIONS. Unless the articles of organization otherwise provide, a debt, obligation, or other liability of a limited cooperative association is solely that of the association and is not the debt, obligation, or liability of a member sol…

RIGHT OF MEMBER AND FORMER MEMBER TO INFORMATION. (a) Not later than ten (10) business days after receipt of a demand made in a record, a limited cooperative association shall permit a member to obtain, inspect, and copy in the association’s principal office required information …

ANNUAL MEETING OF MEMBERS. (a) Members shall meet annually at a time provided in the organic rules or set by the board of directors not inconsistent with the organic rules. (b) An annual members meeting may be held inside or outside this state at the place stated in the organic r…

SPECIAL MEETING OF MEMBERS. (a) A special meeting of members may be called only: (1) As provided in the organic rules; (2) By a majority vote of the board of directors on a proposal stating the purpose of the meeting; (3) By demand in a record signed by members holding at least t…

NOTICE OF MEMBERS MEETING. (a) A limited cooperative association shall notify each member of the time, date, and place of a members meeting at least fifteen (15) and not more than sixty (60) days before the meeting. (b) Unless the articles of organization otherwise provide, notic…

WAIVER OF MEMBERS MEETING NOTICE. (a) A member may waive notice of a members meeting before, during, or after the meeting. (b) A member’s participation in a members meeting is a waiver of notice of that meeting unless the member objects to the meeting at the beginning of the meet…

QUORUM OF MEMBERS. Unless the organic rules otherwise require a greater number of members or percentage of the voting power, the voting member or members present at a members meeting constitute a quorum. Added by Laws 2009, c. 68, § 49, eff. Jan. 1, 2010.

VOTING BY PATRON MEMBERS. Except as provided by subsection (a) of Section 51 of this act, each patron member has one vote. The organic rules may allocate voting power among patron members as provided in subsection (a) of Section 51 of this act. Added by Laws 2009, c. 68, § 50, ef…

DETERMINATION OF VOTING POWER OF PATRON MEMBER. (a) The organic rules may allocate voting power among patron members on the basis of one or a combination of the following: (1) One member, one vote; (2) Use or patronage; (3) Equity; or (4) If a patron member is a cooperative, the …

VOTING BY INVESTOR MEMBERS. If the organic rules provide for investor members, each investor member has one vote, unless the organic rules otherwise provide. The organic rules may provide for the allocation of investor member voting power by class, classes, or any combination of …

VOTING REQUIREMENTS FOR MEMBERS. If a limited cooperative association has both patron and investor members, the following rules apply: (1) The total voting power of all patron members may not be less than a majority of the entire voting power entitled to vote. (2) Action on any m…

MANNER OF VOTING. (a) Unless the organic rules otherwise provide, voting by a proxy at a members meeting is prohibited. This subsection does not prohibit delegate voting based on district or class. (b) If voting by a proxy is permitted, a patron member may appoint only another pa…

ACTION WITHOUT A MEETING. (a) Unless the organic rules require that action be taken only at a members meeting, any action that may be taken by the members may be taken without a meeting if each member entitled to vote on the action consents in a record to the action. (b) Consent …

DISTRICTS AND DELEGATES; CLASSES OF MEMBERS. (a) The organic rules may provide for the formation of geographic districts of patron members and: (1) For the conduct of patron member meetings by districts and the election of directors at the meetings; or (2) That districts may elec…

MEMBER’S INTEREST. A member’s interest: (1) Is personal property; (2) Consists of: (A) governance rights; (B) financial rights; and (C) the right or obligation, if any, to do business with the limited cooperative association; and (3) May be in certificated or uncertificated form.…

PATRON AND INVESTOR MEMBERS’ INTERESTS. (a) Unless the organic rules establish investor members’ interests, a member’s interest is a patron member’s interest. (b) Unless the organic rules otherwise provide, if a limited cooperative association has investor members, while a person…

TRANSFERABILITY OF MEMBER’S INTEREST. (a) The provisions of the Uniform Limited Cooperative Act of 2009 relating to the transferability of a member’s interest are subject to the Uniform Commercial Code. (b) Unless the organic rules otherwise provide, a member’s interest other tha…

SECURITY INTEREST AND SET-OFF. (a) A member or transferee may create an enforceable security interest in its financial rights in a limited cooperative association. (b) Unless the organic rules otherwise provide, a member may not create an enforceable security interest in the memb…

transferee. CHARGING ORDERS FOR JUDGMENT CREDITOR OF MEMBER OR TRANSFEREE. (a) On application by a judgment creditor of a member or transferee, a court may enter a charging order against the financial rights of the judgment debtor for the unsatisfied amount of the judgment. A cha…

AUTHORITY. In this article, “marketing contract” means a contract between a limited cooperative association and another person, that need not be a patron member: (1) Requiring the other person to sell, or deliver for sale or marketing on the person’s behalf, a specified part of t…

MARKETING CONTRACTS. (a) If a marketing contract provides for the sale of products, commodities, or goods to a limited cooperative association, the sale transfers title to the association upon delivery or at any other specific time expressly provided by the contract. (b) A market…

DURATION OF MARKETING CONTRACT. The initial duration of a marketing contract may not exceed ten (10) years, but the contract may be self-renewing for additional periods not exceeding five (5) years each. Unless the contract provides for another manner or time for termination, eit…

REMEDIES FOR BREACH OF CONTRACT. (a) Damages to be paid to a limited cooperative association for breach or anticipatory repudiation of a marketing contract may be liquidated, but only at an amount or under a formula that is reasonable in light of the actual or anticipated harm ca…

BOARD OF DIRECTORS. (a) A limited cooperative association must have a board of directors of at least three individuals, unless the association has fewer than three members. If the association has fewer than three members, the number of directors may not be fewer than the number o…

association’s obligations. NO LIABILITY AS DIRECTOR FOR LIMITED COOPERATIVE ASSOCIATION’S OBLIGATIONS. A debt, obligation, or other liability of a limited cooperative association is solely that of the association and is not a debt, obligation, or liability of a director solely by…

QUALIFICATIONS OF DIRECTORS. (a) Unless the organic rules otherwise provide, and subject to subsection (c) of this section, each director of a limited cooperative association must be an individual who is a member of the association or an individual who is designated by a member t…

ELECTION OF DIRECTORS AND COMPOSITION OF BOARD. (a) Unless the organic rules require a greater number: (1) The number of directors that must be patron members may not be fewer than: (A) one, if there are two or three directors; (B) two, if there are four or five directors; (C) th…

TERM OF DIRECTOR. (a) Unless the organic rules otherwise provide, and subject to subsections (c) and (d) of this section and subsection (c) of Section 31 of this act, the term of a director expires at the annual members meeting following the director’s election or appointment. Th…

RESIGNATION OF DIRECTOR. A director may resign at any time by giving notice in a record to the limited cooperative association. Unless the notice states a later effective date, a resignation is effective when the notice is received by the association. Added by Laws 2009, c. 68, §…

REMOVAL OF DIRECTOR. Unless the organic rules otherwise provide, the following rules apply: (1) Members may remove a director with or without cause. (2) A member or members holding at least ten percent (10%) of the total voting power entitled to be voted in the election of a dire…

SUSPENSION OF DIRECTOR BY BOARD. (a) A board of directors may suspend a director if, considering the director’s course of conduct and the inadequacy of other available remedies, immediate suspension is necessary for the best interests of the association and the director is engagi…

VACANCY ON BOARD. (a) Unless the organic rules otherwise provide, a vacancy on the board of directors must be filled: (1) Within a reasonable time by majority vote of the remaining directors until the next annual members meeting or a special meeting of members called to fill the …

REMUNERATION OF DIRECTORS. Unless the organic rules otherwise provide, the board of directors may set the remuneration of directors and of nondirector committee members appointed under subsection (a) of Section 82 of this act. Added by Laws 2009, c. 68, § 75, eff. Jan. 1, 2010.

MEETINGS. (a) A board of directors shall meet at least annually and may hold meetings inside or outside this state. (b) Unless the organic rules otherwise provide, a board of directors may permit directors to attend or conduct board meetings through the use of any means of commun…

ACTION WITHOUT MEETING. (a) Unless prohibited by the organic rules, any action that may be taken by a board of directors may be taken without a meeting if each director consents in a record to the action. (b) Consent under subsection (a) of this section may be withdrawn by a dire…

MEETINGS AND NOTICE. (a) Unless the organic rules otherwise provide, a board of directors may establish a time, date, and place for regular board meetings, and notice of the time, date, place, or purpose of those meetings is not required. (b) Unless the organic rules otherwise pr…

WAIVER OF NOTICE OF MEETING. (a) Unless the organic rules otherwise provide, a director may waive any required notice of a meeting of the board of directors in a record before, during, or after the meeting. (b) Unless the organic rules otherwise provide, a director’s participatio…